The Knowledge Economy

Dominique Rambures

Chapter 6 in The China Development Model, 2015, pp 103-115 from Palgrave Macmillan

Abstract: Abstract Devoid of raw materials, China developed processing industries before it turned to an economy of knowledge. Theory states that developing countries are supposed to go through three economic sectors of growth return: primary (agriculture, mining), secondary (manufacturing), tertiary (services), if not quaternary (digital economy) where the share of intellectual development is overwhelming. The service sector includes several types of activities: from the noodle soup vendor who has set up a shop around the corner, to the hi-tech company staffed with highly skilled manpower. Western countries that were increasingly moving towards a tertiary, if not quaternary, economy realized that a strong tertiary economy must be backed by a strong manufacturing sector. Most of them have undergone a ‘reindustrialization’ process by pulling back some of the manufacturing units formerly transferred to emerging or developing countries. China is working the other way around. Manufacturing industries account for an unusually high share of the economy. Therefore, salary increases must be compensated through increasing competitiveness. The policy of research and innovation is aimed at raising the added-value of Chinese output and the profile of the range of Chinese-made products.

Keywords: Foreign Market; Domestic Market; Knowledge Economy; Foreign Company; Speed Train (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-46549-8_7

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DOI: 10.1057/9781137465498_7

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